Stocks, Oil Run Weekly Winning Streaks To Three

Stocks ended higher for a third straight week, as did oil, as a number of U.S. economic data points, including monthly job additions, were better than expected. This week's advance pushed the Dow back above 17,000 and the S&P 500 back to within a hair of 2,000.

MACRO NEWS: In the U.S., nonfarm payrolls grew by 242,000 jobs last month, versus expectations for 195,000 job additions. The unemployment rate remained at 4.9%, as forecast. Average hourly earnings declined 0.1% in February compared to the prior month, versus expectations for them to be up 0.2%. The trade balance report for January showed a deficit of $45.7B, versus expectations for a $44B deficit. Markit's manufacturing PMI came in at 51.3 in the final February print, improved slightly versus the 51.0 flash reading but down from 52.4 in January.

ISM manufacturing reading came in at 49.5, up from 48.2 last month and above the 48.5 consensus forecast. Construction spending rose 1.5% in January, topping expectations for it to have grown 0.3%. Nonfarm productivity for the fourth quarter was down 2.2%, versus expectations for it to be down 2.9%. Markit's services index dropped to 49.7 in February from 53.2 in January, coming in a bit below the 50.0 consensus forecast. ISM's services index dipped 0.1 point to 53.4 in February, which was a bit above the 53.1 consensus forecast. Factory orders rose 1.6% in January, less than the forecast gain of 2.1%...

The Federal Reserve said in its latest Beige Book that reports from the twelve Federal Reserve Districts continued to indicate that economic activity expanded in most Districts since the previous report. "Across the nation, business contacts were generally optimistic about future economic growth," the report added...

In Asia, the People's Bank of China kicked off the week by cutting its reserve requirement ratio by 0.5 percentage points, meaning banks will be required to hold lower reserves and will hopefully increase their lending. China's official manufacturing PMI came in at 49.0, versus expectations for a reading of 49.3, while the unofficial, Caixin manufacturing reading came in at 48.0, versus the consensus 48.4 forecast. Caixin's services PMI fell to 51.2 in February from 52.4 in January. In Europe, the overall eurozone services number came in at 53.3, versus the consensus forecast of 53.0. Bloomberg reported, citing sources, that the Chinese government intervened on Friday to support its stock market ahead of the start of the National People's Congress' annual meeting. Additionally, Moody's downgraded its outlook on Chinese government debt to "negative" from "stable" days before the National People's Congress votes on the country's latest five year plan. The ratings agency said the downgrade was driven by expectations that China's fiscal strength will continue to decline, along with concerns about policymakers' credibility...

In Europe, inflation showed a year-over-year decline of 0.2% for February in the eurozone, versus expectations for an unchanged reading. The overall Eurozone manufacturing PMI came in at 51.2, slightly ahead of the consensus forecast for a reading of 51.0. The overall eurozone services PMI came in at 53.3, versus the consensus forecast of 53.0.

COMPANY NEWS: On Tuesday night, Aubrey McClendon, the former CEO of Chesapeake Energy (CHK) and its co-founder, was indicted by a federal grand jury on charges that he conspired to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma while leading the company. The next day, Oklahoma City Police confirmed that McClendon was found dead after driving into a wall at high speed. The event, though not officially declared to be a suicide, certainly appeared to be one and additional details emerged in the days that followed recounting McClendon's recent financial troubles. Amid the shocking headlines, and the continued advance in oil prices, Chesapeake's stock climbed nearly 90% this week...

Honeywell (HON) announced that it is no longer pursuing a strategic combination with United Technologies (UTX). While it "strongly disagrees" with United Technologies' characterization of the regulatory and customer risks associated with the transaction, continuing to try to negotiate with an unwilling partner is "inconsistent with [its] disciplined acquisition process," Honeywell explained. For its part, United said Honeywell ending its pursuit is the "appropriate outcome given the strong regulatory obstacles, negative customer reaction and the potential for a protracted review process that would have destroyed shareholder value"...

Last Sunday, Valeant announced that J. Michael Pearson returned as Chief Executive Officer following his recovery from severe pneumonia and other complications. However, Pearson is not resuming his role as Chairman of the Board, as the company has separated the roles, and Robert Ingram, who had been serving as interim chairman, has now been appointed chairman. Additionally, Valeant announced that it was postponing the release of its quarterly results, which had been scheduled to occur Monday, and said that it was withdrawing its previous 2016 guidance. Valeant also confirmed that it has received a notice from Actavis (AGN) stating that the FDA has received Actavis' abbreviated new drug application containing a "Paragraph IV" patent certification seeking approval to market a generic version of Salix's Xifaxan. After the market close on Monday, Valeant confirmed press reports that it received a subpoena from the SEC in the fourth quarter of 2015. After the market close on Wednesday, Valeant confirmed that Deb Jorn resigned as Executive Vice President and Company Group Chairman, effective immediately. Valeant subsequently issued a follow-up press release Thursday morning in response to inquiries from investors regarding Jorn's departure. Valeant said, "It is our understanding that Deb Jorn decided to leave Valeant for personal reasons. Her departure is not the result of an action taken by the Ad Hoc Committee of the Board of Directors." Then, Friday, shares slid further still after Gretchen Morgenson of the New York Times, in a piece titled "A Troubling Timeline at Valeant," detailed the company's "bevy of blunders." For the week, Valeant shares fell 24%...

Monsanto (MON) shares slid after the company cut its full-year profit guidance. The company foresaw weak foreign currencies, generic glyphosate pricing and compressed grower margins coming from lower commodity prices as headwinds entering the fiscal year and these have not abated, Monsanto explained. Additionally, the company has seen additional headwinds from competitive dynamics and the delay in the EPA label for in crop use of dicamba, the agricultural giant said... Herbalife (HLF) tumbled 7% on Thursday after disclosing that it overstated the growth of its new members in 2015... HP Enterprise (HPE) rallied on Friday after the recently independent company, which issued its first report after being fully separated from HP Inc. (HPQ), posted quarterly results that were a bit better than expected and said that it plans to use the majority of the $2B in proceeds from its Tsinghua deal for share repurchases.

Among other companies reporting earnings this week, Smith & Wesson (SWHC), Hertz (HTZ) and Joy Global (JOY) rose immediately following their quarterly reports, while Ciena (CIEN), Medtronic (MDT), Endo (ENDP), Ambarella (AMBA), Nimble Storage (NMBL) and Dollar Tree (DLTR) declined after announcing their quarterly results... Research firm Autodata estimated that the U.S. seasonally adjusted auto sales rate, or SAAR, was about 17.5M vehicles last month. Ford (F) and Fiat Chrysler (FCAU) shares gained about 4.5% and 7%, respectively, on Tuesday after both automakers posted better then expected U.S. sales gains in February. General Motors (GM), which unexpectedly reported a slight year-over-year decline that it blamed on a planned reduction in rental deliveries, also advanced about 2% on the day of its report... On the M&A front, Carmike Cinemas (CKEC) agreed to be acquired by rival movie theater operator AMC Entertainment (AMC) for $30.00 per share in cash in a transaction valued at approximately $1.1B, including the assumption of Carmike net indebtedness.

Checkpoint Systems (CKP) gained about 29% on Wednesday after it agreed to be acquired by CCL Industries for $10.15 per share. Federal-Mogul (FDML) jumped over 45% on Monday after its majority shareholder, Icahn Enterprises (IEP), offered to purchase the shares of Federal-Mogul common stock not owned by IEP in a merger transaction for $7 per share in cash. Samsonite struck a deal to acquire Tumi for $26.75 per share in an all cash transaction, valuing Tumi at an equity value of $1.8B.

INDEXES: For the week, the Dow gained about 2.2% to close at 17,006.77; the S&P 500 rose about 2.65% to close at 1,999.99; and the Nasdaq advanced about 2.75% to close at 4,717.02.